Wednesday, April 18, 2012

April 2002: Drilling in ANWR Would Take 10 Years to Produce: The Consequences of Inaction

Senate Republicans have release the following video noting Senate floor discussion from ten years ago this week when Democrats were claiming that we can't drill in ANWR because it would take 10 years for the oil to be produced (H/T the Heritage Foundation):

Governor Palin noted in highlighted in her Facebook note yesterday how much energy independence is interrelated with all components of public policy and daily life:

He fails to understand the fundamental truth that there is an inherent link between energy and prosperity, and energy and security. Oil prices affect everything in our lives, including where we send our sons and daughters in war. Developing resources here grows our economy, decreases our trade imbalance, creates hundreds of thousands of good-paying jobs, and secures our union by eliminating our dependence on dangerous foreign regimes who use our energy insecurity as a weapon against us. Access to secure domestic energy will make us a more peaceful and prosperous nation.

Obama doesn’t understand this—just as he doesn’t understand the dangers of his wasteful spending. Our energy policy is also linked with our fiscal and monetary policies. In light of America’s unsustainable $16 trillion debt, there’s more talk about dumping the U.S. dollar as the world’s reserve currency, which is the currency used to buy and sell oil. If that happens, we’ll feel the pain of inflation everywhere—especially at the pump. That, in turn, will trickle down to everything in our economy. Those living on fixed incomes and retirement pensions and annuities will feel the pain especially hard. So, this is one more reason to get government debt under control with sound monetary policy that doesn’t try to “inflate away” our debt with currency manipulation and gimmicks like quantitative easing.

There is an interelatedness between our national security and energy security. The 4th largest importing nation is Venezuela--a nation controlled by a dictator closely allied with Iran, who has threatened multiple times recently to block the Strait of Hurmuz where 20% of the world's oil passes through daily. Oil from Saudi Arabia, Iraq, and Kuwait all are transported through this area, and these three countries are among the top ten importing sources of oil. Drilling here instead of relying on foreign nations has the potential to create a million jobs by 2018. Plus, what could be secure our nation more than to make America our own greatest source of energy.

One thing that Governor Palin understands that very few people mention is the relationship between monetary policy and energy. In fact, Governor Palin warned about how a devalued dollar may lead to the the dollar being dropped as the reserve currency and the relationship of that sobering possibility to both inflation and the debt two and a half years ago in October of 2009. This is a point she later echoed when she called out Ben Bernanke on his quantitative easing implementation in November 2010:

All this pump priming will come at a serious price. And I mean that literally: everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher. And it’s not just groceries. Oil recently hit a six month high, at more than $87 a barrel. The weak dollar – a direct result of the Fed’s decision to dump more dollars onto the market – is pushing oil prices upwards. That’s like an extra tax on earnings. And the worst part of it: because the Obama White House refuses to open up our offshore and onshore oil reserves for exploration, most of that money will go directly to foreign regimes who don’t have America’s best interests at heart.

Now, nearly a year and a half later, and oil is over $100 a barrel. This, of course, makes the price of everything higher. Not only is inflation by itself causing consumer items to be more expensive, but high fuel prices (also raised by inflation) are contributing to increased consumer prices as well. But, oh no, we were supposed to listen to our betters who told us ten year ago that ANWR would take too long to develop.